One of Britain’s biggest banks has called on the “social conscience” of large businesses to encourage them to settle bills to small and medium-sized suppliers on time.
Barclays said that the late payment of commercial debts was damaging cashflow, preventing new hiring opportunities and investment and in some cases putting suppliers’ survival at risk.
The lender said that more than nine in ten medium-sized companies — those with 50 to 249 staff — were waiting on overdue invoices to be paid. The figure across all small and medium-sized companies was three in five, while two in five said that they were more likely to experience late payments because of the pandemic.
Four in five of the 500 surveyed business owners who had experienced poor payment practice said that they would refuse a job with a potential customer if they were known for paying late. Two fifths said that their mental health had suffered becaused of the stress caused by overdue bills. More than half said they would boycott a business — big or small — if they knew they regularly paid suppliers late.
Hannah Bernard, head of business banking at Barclays, said: “We want to unite the small business community in tackling this issue and raise the social conscience of larger businesses who don’t pay on time. Having a constant cycle of late payments will hamper the future growth of the economy.”
Liz Barclay, the government’s small business commissioner, responsible for helping small businesses to get overdue debts settled, said: “We need to see potential investors refusing to invest in firms that don’t treat small suppliers well . . . A change in payment culture is decades overdue.”
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Barclays urges late-paying large firms to settle up